CVS Health is rolling out a new pharmacy format in 2025 among hundreds of drug stores …(+)
CVS Health
CVS Health is rolling out new and small pharmacy formats amidst closures of hundreds of drug stores across the industry and investor pressures making money.
This year's CVS will roll out “small formats” locations in at least 12 locations, the Wall Street Journal reported over the weekend. This is preparing for private ownership after CVS' main rival, Walgreens Boots Alliance, worked on a financial shift, closing hundreds of stores and last week Walgreens announced a $10 billion sale to Sycamore Partners.
“We plan to open smaller format CVS pharmacy locations in some communities across the country over the next year,” CVS confirmed in a statement Sunday. “New pharmacies will be introduced in certain neighborhoods to help bridge care gaps and make patients more accessible to medication, vaccinations and other health care services offered by pharmacists.”
Whether it's CVS or Walgreens, which opened its “small store” in 2019, the new and small formats are not new.
However, as both companies are in large amounts of debt and face pressure from a decline in sales of general merchandise at the front of stores, pushing for new sizes and formats has become more urgent.
Meanwhile, both companies own or leased real estate, making it more Americans face more pressure as they shop online, shop at traditional drug stores like CVS, Rite Aid, and Walgreens, face more pressure from Amazon and more, and patients are physically required to come to the store.
CVS is already reformatting stores that have been closed to include traditional pharmacies and senior centers run by Oak Street Health, which CVS paid $10 billion a couple of years ago.
According to CVS, the small drugstore format is in line with a “customized approach” to “footprints focused on the specific needs of the communities we serve,” and “ensures better support of patients and ensures adequate geographic coverage.”
CVS will close 900 stores between 2022 and 2024, with another 270 this year. Meanwhile, Walgreens is in the process of closing 1,200 of its 8,500 US stores over three years. And last year, Rite Aid was born from federal bankruptcy protection as a more local drugstore chain operated in 16 states after cutting over 500 stores during bankruptcy proceedings.
Still, CVS said that closing stores do not mean leaving the market, and that 85% of Americans live within 10 miles of retail pharmacies. The company has also opened pharmacies with 100 stores between 2022 and 2024, and plans to open nearly 30 CVS pharmacies in 2025, including those in Target Stores in 2025,” the company said.
“We plan to open smaller format CVS pharmacy locations in some communities across the country over the next year,” CVS said in a statement. “The new pharmacies will be introduced in certain neighborhoods to help bridge care gaps and make patients easily accessible to drugs, vaccinations and other health care services offered by pharmacists. Each location averages under 5,000 square feet, with full-service pharmacies with limited over-the-counter products available to purchase, and are designed to meet the needs of specific pharmacies in the community.”
